Public sector companies (PSUs) have beaten the private sector in the financial year 2017-18 by registering an employment growth of 8%, higher than the latter’s 6.3%, a study has shown. The PSU job growth was mainly driven by 58% employment growth in the logistics sector, 13% in the finance sector, and 8% in the banking sector, a Care Ratings study said.
The study of employment growth in 700 companies also showed that overall job growth has declined in FY18 as compared with previous fiscal even as there was robust sales growth in some cases. The total permanent employees in the sample of these 700 companies increased from 3.98 million in FY16 to 4.29 million in FY17, further increasing by 6.6% in FY18 to touch 4.57 million.
“There has been a marginal dip in the employment growth from 7.7% in FY17 to 6.6% in FY18 indicating pressures of job creation,” the study said.
The companies with net sales of more than Rs 10,000 crore, between Rs 250-500 crore witnessed improvement in employment growth in FY18 compared to the previous year, while companies with net sales of Rs 50-100 crore, Rs 100 to 250 crore and Rs 500-1000 crore underperformed and pulled down the overall employment growth in FY18, the study said.
“On juxtaposing the sales growth with employment growth, we can conclude that there are many sectors in
which sales growth has not led to a corresponding growth in employment,” the study added.
There are 12 sectors which experienced growth of more than 6.6%, out of which 10 sectors have double-digit growth. A majority of 24 sectors have witnessed growth below the 6.6% aggregate level, 9 of which have witnessed a meagre growth of 0-1% and 10 sectors having witnessed negative growth.
Ferromanganese, consumer durables, chemicals, hospitality, trading, FMCG, capital goods, logistics and textiles were private sectors that witnessed a meagre growth of 0-1%. The sectors that witnessed a higher-than-average growth rate in employment in FY18 are Crude oil (19.2%), alcohol (17.3%), finance (16.9%), telecom (16.3%), construction materials (15.6%), aviation (13.1%), realty (13%), non-ferrous metals (10.5%), automobile & auto-ancillary (10.3%), retailing (8.8%), banking (7%)
Sectors like shipping, media & entertainment, abrasive, electrical, iron & steel and diamond have witnessed a robust sales growth in FY18 but at the same time have witnessed a negative growth in employment.